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Zero Rss

AI & The Same Old Politicized Hysteria

Zero Rss
6 days 16 hours ago
AI & The Same Old Politicized Hysteria

Authored by Victor Davis Hanson via American Greatness,

The midterm elections are six weeks away.

Suddenly, a debate has erupted over the existential dangers of artificial intelligence. Jacob Coxon, a little-known Silicon Valley researcher who worked at OpenAI and Anthropic, resigned and went public with a dire warning: AI now threatens the future of the world.

Shortly beforehand, news broke of the Hugging Face episode, in which OpenAI's advanced AI "agents" autonomously hacked another company's computers.

Bedlam followed.

Weaponizing AI

Almost on cue, Democrats seized on the alarm as a new cause célèbre, accusing Donald Trump and the MAGA movement of recklessly courting Armageddon.

The Left demanded international treaties, ignoring the dismal record of such globalist projects: the League of Nations, the Kellogg-Briand Pact, the Washington Naval Treaty, the Versailles Treaty, the Munich Agreement, the Paris Climate Accord, and the UN Human Rights Council.

Panicky AI executives soon joined the chorus, speaking as though they could neither control their companies nor monitor their own research.

Their conduct casts doubt on this safety rhetoric. Just yesterday came news that Anthropic had built a fully automated, AI-controlled biolab, even though AI-generated plagues are a staple of the doomsday case. OpenAI, meanwhile, is resisting legal liability for harm caused by its products.

The familiar political script followed.

Democrats in Congress demanded hearings. They are unlikely to use them to ask tech executives or administration officials serious questions. More likely, they will spend their allotted time shouting, wagging their fingers, displaying their ignorance, and spinning wild conspiracy theories.

Sen. John Kennedy, who has proposed reasonable AI regulation for years alongside Republicans like Sen. Josh Hawley, recently observed that "the Democrats clearly are trying to politicize this."

The reaction to a June administration decision offered still stronger evidence. Both purportedly worried AI companies and Trump-hating AI-risk advocates objected when the administration barred Anthropic from giving foreign nationals access to its Mythos and Fable 5 models - models whose cybersecurity risks the company itself had publicized.

With the trans delirium and the demonization of ICE losing force, however, the Left apparently needs a new existential crisis to blame on Trump before the midterms.

This tactic - never letting a crisis go to waste - is hardly new.

A Litany of Political Panics

Baby boomers grew up hearing dire warnings about the "population bomb," the title of Stanford professor Paul Ehrlich's 1968 bestseller predicting that unchecked population growth would lead to global catastrophe.

Ehrlich and others argued that rising affluence would swell populations, producing famine, pestilence, war, and ultimately global catastrophe.

The thesis collapsed, but not before it produced a pervasive "Spaceship Earth" mentality. Guilt-ridden Americans were told to remain childless or, at most, to have one child.

Other countries followed. The existential danger now facing Western societies is the reverse: the citizens of these countries are now having far too few children. Their populations are shrinking and aging, while a dwindling cohort of young taxpayers must support ever-growing entitlements.

Green apocalypticism followed this. The science of ecology gave way to radical environmentalism, and legitimate concern about industrial pollution and acid rain became propaganda that the Earth was doomed unless the West renounced capitalism. Even heat was redefined as pollution. When "global warming" proved insufficiently terrifying, it became "climate change."

The new phrase was a brilliant catch-all. Rain and drought, snow and heat, calm seas and hurricanes could all be cited as proof that modern, fossil-fueled Western consumerism had doomed the planet.

European Union countries nearly wrecked their economies by subsidizing inefficient wind and solar power while abandoning nuclear energy and fossil fuels.

The 1980s brought another panic: nuclear war would soon incinerate the cities, and the resulting dust would blot out the sun.

Politics drove much of the frenzy. The Left despised Ronald Reagan and saw no other way to prevent his reelection in 1984.

For years, the United States had responded weakly as the Soviet Union deployed mobile, intermediate-range nuclear missiles aimed at European cities. Reagan finally answered by stationing Pershing II launchers and ground-launched cruise missiles in Western Europe. The Soviets eventually withdrew their nuclear-tipped missiles.

No matter. A manufactured epidemic of fear swept the West regardless.

The popular scientist Carl Sagan toured the country promoting his terrifying theory of a "nuclear winter" after what he treated as an inevitable Soviet-American nuclear exchange.

Hollywood joined the campaign in 1983 with The Day After, a grim portrayal of a nuclear strike on the United States and its gruesome aftermath. Some 100 million Americans watched this movie, which depicted mushroom clouds rising over Kansas.

The psychodrama did not stop Reagan's reelection. Soon afterward, he negotiated a missile treaty with the Soviet Union, proving that he was hardly the deranged warmonger that his opponents delusionally imagined he was.

By the turn of the millennium, America was lurching from one amplified panic to another. Al Gore became a centimillionaire and a Nobel laureate by warning that internal-combustion engines would boil the planet, bringing both lethal drought and catastrophic coastal flooding.

Polar bears would die, coral reefs would disintegrate, icebergs would menace shipping, and coastal homes would disappear beneath the sea.

Only a Marshall Plan-scale replacement of gasoline and diesel engines with wind turbines, solar farms, and batteries, we were told, could save humanity.

The planet survived. Al Gore grew wealthier, and Goreism then quietly receded into the shadows.

#MeToo began with legitimate accusations against Hollywood predators such as Harvey Weinstein, who had long coerced young actresses into sex in exchange for roles - the old casting couch revived.

Before long, however, the movement had become a new Salem witch trial, treating almost any allegation of rude conduct between the sexes as the equivalent of rape.

Insinuation and rumor damaged the reputations of men ranging from Garrison Keillor and Sen. Al Franken to Supreme Court Justice Brett Kavanaugh, often with little or no evidence. A legitimate campaign against sexual harassment had deteriorated into character assassination.

Millions of men began searching their memories for an off-color joke, an overlong hug, or a kiss that might resurface years later to ruin their careers while advancing those of their accusers.

The McCarthyite frenzy subsided only when liberals realized that their Frankenstein monster had turned on its creators and threatened too many of their own political icons.

They had no wish to derail the likely presidential candidacy of the handsy Joe Biden, whom several women accused of inappropriate touching and hugging and one even accused of violent sexual assault.

Nor did they wish to revive the sordid record of former president Bill Clinton's many brief and exploitative sexual encounters.

As #MeToo faded, COVID hysteria took its place. The initially virulent virus warranted serious concern; more than a million Americans would die from it. Yet concern became madness once defeating Trump took precedence over fighting the disease.

Officials closed schools even though the virus posed little danger to young people or children. The first nationwide lockdown in American history devastated the economy.

Officials presented the new mRNA vaccines as ironclad protection against infection and transmission. Those who resisted were treated as near-outlaws, fired, or ostracized, although the shots had not been proved to guarantee lasting immunity or perfect safety and often carried with them serious side effects, many or most of which were denied or swept under the rug.

The government expelled 8,500 service members who refused vaccination even as, with liberal approval, 10,000 unvaccinated and unvetted illegal immigrants crossed the border each day.

Teachers' unions kept public schools closed, inflicting lasting harm on a generation of students. Quarantines and shelter-in-place orders contributed to domestic violence, drug abuse, and alcoholism. Millions missed heart and cancer screenings. The shuttered economy destroyed hundreds of thousands of small businesses and upended millions of lives.

Still, shyster "experts" predicted years of mass death comparable to the plagues that ravaged ancient Athens and Constantinople.

They grossly misrepresented or caricatured the classical medical understanding of acquired natural immunity. Dr. Fauci and his circle of "authorities" also failed to disclose their role in funding gain-of-function research at the Communist Chinese laboratory in Wuhan that had created the mysterious virus.

What ended the panic?

As a few sober - and therefore demonized - health experts had predicted, the virus evolved into less virulent strains while prior infections increased natural immunity.

COVID eventually receded to the level of a severe flu. By then, this hysterical, manufactured response to it had wrecked the economy, destroyed the final year of the Trump administration, and inflicted incalculable physical and psychological harm on the American people.

The lockdowns helped ignite an even greater panic after George Floyd died in Minneapolis police custody. A video showed an officer restraining the resisting Floyd with a knee on his neck, using what was then considered a more or less standard protocol; within moments of its release, the country erupted.

False claims spread that police disproportionately killed unarmed black men. Murals portrayed Floyd as a haloed martyr with angel wings, although he was a career felon detained for passing counterfeit currency who resisted arrest, was high on drugs, and suffered from cardiovascular disease and the effects of a recent COVID infection.

No matter - riots soon swept the country. More than 35 Americans were killed, roughly 2,000 police officers were injured, and about 14,000 people were arrested. Property losses reached some $2 billion. Rioters torched a police precinct and a federal courthouse and tried to storm the White House grounds.

Universities dropped SAT requirements. "Black" was given a sacral form of capitalization; "white" was conspicuously left lowercase.

New racial quotas sharply reduced white male admission rates at elite schools. Institutions hired tens of thousands of DEI commissars. Campaigns to defund the police, release habitual felons, and decriminalize theft spread nationwide.

Then the George Floyd frenzy abruptly subsided.

Black Lives Matter's founders were exposed as grifters who had misappropriated funds while acquiring plush homes and expense accounts.

Data showed that, relative to annual police encounters, unarmed black men were not fatally shot at a higher rate than white men.

After abandoning admissions standards, universities found themselves inflating grades, adding remedial courses, and lowering academic expectations for students who had not met requirements the institutions had deemed indispensable only a year earlier.

The post-Floyd frenzy finally ebbed as the public recognized that tribalism and attacks on meritocracy were themselves racist and nihilistic.

What, then, does today's Democratic embrace of AI alarm share with these earlier mass frenzies?

First, each began with a legitimate concern that politics and a profit motive soon warped the problem beyond all recognition. The Left appropriated the underlying issue to gain political advantage and power.

Worry about overpopulation goes back to Malthus, but The Population Bomb appeared in the election year of 1968. Its political subtext blamed Western consumerism, capitalism, religion, and traditional pronatalism for civilization's supposed approaching end.

The danger of nuclear war had been real since the start of the atomic arms race. Nuclear-winter paranoia, however, was promoted to damage Ronald Reagan during his reelection campaign.

Al Gore's book Earth in the Balance converted tentative scientific speculation about climate change into partisan dogma. It blamed capitalist consumer culture for destroying the planet and, in the 1992 election year, reinforced the Clinton-Gore campaign's attack on the Bush status quo.

#MeToo reached its political peak during the Kavanaugh hearings. Democrats repurposed a movement against Hollywood abuse to derail Trump's Supreme Court nominee with unfounded claims that Kavanaugh had assaulted a teenage girl decades earlier. Democratic operatives coached the now-troubled adult before she appeared on national television.

COVID began with legitimate fear of an escaped, artificially enhanced virus that killed millions - a fear the Left initially dismissed as anti-Chinese racism. It, too, was soon politicized. We now know that Anthony Fauci, his associates at the National Institutes of Health, and other presidential advisers despised Trump and understood that shutting down his booming economy could end his presidency.

The Biden campaign then blamed Trump for the economic damage caused by the lockdown.

George Floyd's death was genuinely shocking on video, especially without the surrounding context. But the 2020 campaign transformed it into the catalyst for months of rioting and a weapon against the supposedly racist Trump and MAGA movement. As cities burned, the Left argued that Trump was powerless to stop the violence - and a Nazi if he tried.

Second, every panic was exaggerated. The planet was neither overpopulated nor running out of food and fuel. Nuclear war was not imminent, and Earth did not face destruction within a decade. Women were not experiencing an epidemic of sexual assault. The lockdowns likely caused more harm than the virus, and police were not conducting a mass slaughter of black men.

The underlying dangers were not equally imaginary. Nuclear war, for example, came terrifyingly close in 1962 and again in 1983.

Among genuine threats, AI most resembles nuclear weaponry. That assessment may change, but AI has so far proved to be an extraordinarily powerful and therefore potentially dangerous tool. Its moral character depends on the people who build and control it.

That is why the United States can neither entrust AI regulation to international bodies with dismal track records nor permit Communist China to monopolize the technology.

Trump, who is a much more skillful diplomat than his globalist critics admit, has instead pursued bilateral negotiations with China over the real dangers both countries face. Those dangers were illustrated just yesterday, when an AI hallucination reportedly almost prompted a U.S. attack on a Chinese cargo ship.

In the end, Americans must rely on their own people, constitutional government, and open culture to harness AI for the public good - and to deter hostile powers from using it for evil.

Tyler Durden Tue, 09/22/2026 - 15:45
Tyler Durden

Have You Seen The Surge In US Rough Rice Futures

Zero Rss
6 days 17 hours ago
Have You Seen The Surge In US Rough Rice Futures

America's rice harvest is forecast to fall to its lowest level in 33 years. CBOT rough rice futures, the benchmark for US long-grain rice before milling, are surging higher at the end of summer after rising 69% so far this year.

USDA forecasts total production at 158.2 million hundredweight, roughly 23% below last year's 206.7 million. Harvested acreage is projected at just 2.057 million acres, the lowest since the 1972/73 season. 

"While beginning stocks are raised 4.6 million cwt to a 40-year high of 58.4 million cwt, production is reduced 0.2 million cwt to 158.2 million, a 33-year low, as a reduced forecast for harvested area more than offsets a higher yield," USDA wrote in a report.

The good news is that a meaningful supply buffer remains, with the year beginning with 58.4 million hundredweight in inventories, a 40-year high. This will provide a cushion against any lost production.

Even with that buffer, USDA expects ending inventories to shrink to 40.4 million hundredweight, down 31% from a year earlier. Its forecast for the all-rice season-average farm price is $14.90 per hundredweight, about 20% above the previous year.

USDA said there was a "notable shift to a relatively tight U.S. supply situation" from last year's harvest to this year's.

That is being reflected in CBOT rough rice futures, which have jumped 69% so far this year to $16 per hundredweight and could be on track to test the $19.65 high reached in the summer of 2023.

CBOT tracks US long-grain rough rice. International prices, especially in Thailand, have also risen.

Goldman analysts estimate this El Niño could push global food commodity prices up more than 15%.

It is not a great sign when the grain that feeds the world is soaring in price in multiple regions, suggesting further food inflation pressure on household budgets.

Tyler Durden Tue, 09/22/2026 - 15:25
Tyler Durden

Mullin: DHS Investigating 1,620 Non-Citizen Voter Fraud Cases

Zero Rss
6 days 17 hours ago
Mullin: DHS Investigating 1,620 Non-Citizen Voter Fraud Cases

Authored by AG News Staff via American Greatness,

The Department of Homeland Security is investigating 1,620 cases of alleged voter fraud involving noncitizens and reviewing hundreds of thousands of additional cases, DHS Secretary Markwayne Mullin said.

Mullin told Fox News that DHS has made 151 arrests and is examining another 300,000 cases based on information compiled from state voter rolls.

"We're scrubbing them. We're comparing them to those that are in the country illegally, those that are legal permanent residents and those that are citizens" to determine whether they voted legally, Mullin told Fox News contributor Kayleigh McEnany.

The investigation puts renewed attention on election integrity and the participation of noncitizens in U.S. elections, an issue President Donald Trump has repeatedly raised.

According to Mullin, the cases uncovered by DHS support Trump's longstanding contention that election fraud has occurred.

"We continue to see that. Every single vote, Kayleigh, that we talk about, that was at the hands of an illegal canceled out a citizen that was legally registered and able to vote," Mullin said.

DHS is examining the additional cases to determine whether individuals identified on state voter rolls were citizens, legal permanent residents or in the country illegally, according to Mullin.

Tyler Durden Tue, 09/22/2026 - 15:05
Tyler Durden

Copper Nears Record High As Shanghai Inventories Tumble, Fueling Scarcity Fears

Zero Rss
6 days 17 hours ago
Copper Nears Record High As Shanghai Inventories Tumble, Fueling Scarcity Fears

Copper has almost retraced the selloff sparked earlier this month, following Reuters' report that the White House's "copper tariff plan stalls amid affordability concerns." Prices are back near record highs in London as Bloomberg reports tightening supplies in China's physical market, reinforcing scarcity concerns.

Three-month futures on the London Metal Exchange rose .7% to $14,763 a ton, putting the industrial metal within striking distance of its September 10 record of $14,875.

The driver, according to the outlet, is new Shanghai Metals Market data showing shrinking Chinese inventories. Those inventories fell to 43,900 tons, the lowest since 2023.

This year's rally follows a volatile stretch of upside price action, as uncertainty over potential US import tariffs on copper sent record inflows into US warehouses and tightened availability elsewhere.

We have highlighted how deteriorating conditions across global mining operations are adding to supply woes in the physical market for the industrial metal.

Copper, critical for AI and power grid buildouts, has climbed 18% this year and 70% since its April 2025 lows, according to Bloomberg data.

Veteran commodities strategist Jeff Currie has warned repeatedly that "physical economy is repricing scarcity in the real world."

With copper approaching record highs, The Market Ear's latest technical analysis report examines the price levels to watch for confirmation of a breakout (read here).

Tyler Durden Tue, 09/22/2026 - 14:45
Tyler Durden

Trump Calls For Diesel Export Ban After 3-Hour 'Very Productive' Iran Talks

Zero Rss
6 days 17 hours ago
Trump Calls For Diesel Export Ban After 3-Hour 'Very Productive' Iran Talks Summary
  • US-Iran talks: Unnamed US admin representatives held 3-hour talks with Iranian officials on sidelines of UN General Assembly.

  • Trump's UN address ultimatum: Touts possible deal 'after' US midterm elections, but also says: "Do I drive them into hell with no chance of survival?"

  • Diesel export ban: Trump said he had discussed a potential ban on U.S. diesel exports with his team, as lawmakers push for measures to address elevated domestic fuel prices.

  • Signs historic Greenland security deal: Trump signs the security agreement with Denmark and Greenland.

  • Trump addresses AI challenges in speech: He promoted a more permissive approach to AI, referring to it as "super intelligence." He said "The United States leads the world in super intelligence, and we'll continue to do so safely and responsibly."

//--> US-Iran Final Nuclear Deal by December 31, 2026?
Yes 16% · No 85%
View full market & trade on Polymarket

*  *  *

3-Hour Iran Meeting; Proposed Diesel Export Ban

Trump administration officials have held a long meeting with the Iranian delegation on the sidelines of the UN General Assembly in New York on Tuesday, with the president hailing it as a "very good" meeting. He further called it "very productive" and that "they have another one scheduled in the very near future."

As for who represented the White House, no specific names were given, but President Trump while addressing reporters appeared to reference his special envoys Steve Witkoff and Jared Kushner as they sat near him. "It was a meeting that lasted for three hours," Trump indicated.

Confirmed: Iran’s foreign minister, Abbas Araghchi, met with the Steve Witkoff, US special envoy, and Jared Kushner on the sidelines of the General Assembly at U.N headquarters in New York, according to NYT, citing two Iranian officials

Not confirmed: A high-ranking source told Al Arabiya: The New York meeting between the American and Iranian delegations broke the deadlock in the negotiations; A breakthrough between America and Iran is possible, but it requires multiple steps.

Iran's armed forces: says Trump's statements on Iran at the UNGA are "tools are domestic propaganda."

In his big UN address earlier in the morning, Trump warned that he could "annihilate" Iran and "send them to hell" - but also held out hope that Tehran would be willing to make a deal, which would likely come after the US midterm elections.

The same afternoon Trump spoke in a meeting with Ukrainian President Volodymyr Zelensky, saying that he has called for a ban on diesel exports. Oil prices pressed lower immediately on the headlines, but soon after began rising again. However, some sources have warned that the controversial proposal could backfire.

Trump said he has discussed a potential diesel export ban with his team, while Treasury Secretary Scott Bessent confirmed that the administration is examining the possibility of such a ban.

Trump endorses a ban on diesel exports: "I've called for that too. I've said, let's not send out the diesel." (Trump has in fact called for other nations to buy energy from the US!) pic.twitter.com/GVYILw1ou4

— Aaron Rupar (@atrupar) September 22, 2026 Trump on Iran, Oil & Midterm Elections

Standing before the United Nations General Assembly, President Trump told the world: "While others have talked, I have acted. While others have spoken of peace, I have made peace."The focus quickly turned to the Islamic Republic of Iran, which Trump charged as responsible for spreading "death and carnage and chaos." He claimed: "They were the bully of the Middle East, but they are the bully no more."

In listing out what have become the admin's typical talking points, Trump issued an even bigger than before number of Iranian citizens he claims were recently killed by their own government, stating without evidence that over 72,000 Iranian citizens had been slaughtered. This number just keeps on and keeps on growing.

Addressing the war itself, Trump hailed that Iran's navy ships now lie "at the bottom of the sea," and their economy is completely gone, and with many capabilities like radar utterly non-existent. Yet, the nuclear threat is still front and center. Reaffirming his red line to "never allow a nuclear weapon," Trump turned to boasting of how his Operation Epic Fury "obliterated their nuclear program beneath mountains of rubble." But again he still holds Iran out as an atomic threat.

One of the more interesting lines came when Trump said Tehran had built a missile capable of hitting Europe, and that the Iranians openly boasted of this. He called on Europeans (who have so far rejected the urging to join a Hormuz military mission) to take note of this. "I have a big decision to make... will a deal be made with Iran, or do I annihilate the Islamic Republic and 'do it quickly'? Do I drive them into hell with no chance of survival?"

President Trump says Iran deal will be made after the midterm elections, and says he has decision between a deal with Iran or destroying them: "Or do I annihilate the Islamic Republic and do it quickly, never giving them a chance to kill and destroy people and countries again?" pic.twitter.com/Y5K6v4B326

— CSPAN (@cspan) September 22, 2026

He talked about potentially annihilating them, and this key line:

“I believe we’ll make a deal right after the election because it doesn’t make sense for them not to,” Trump said. “They’re waiting to see how I do in the midterm election.”

Trump in this Iran section of the speech made some provocative remarks on the US midterm elections. He indirectly invoked the dilemma of high oil prices and how the GOP might do. "I give no credence to the election; I am not running... it doesn't even enter my mind." Instead, a global ultimatum was issued: a call on all nations to join the United States in enforcing the total isolation of Iran, driven by the absolute promise that "It's gonna be done, it's gonna be done fast" - in reference to this decision of achieving either peace or Iran's final destruction.

👀Iranian delegation began to walk out as Trump started the Iran portion of his speech, saying that he has a choice to make about whether to annihilate the country or make a deal with them.

One lower level staff member remains. pic.twitter.com/iFtL9ntfkv

— Farnoush Amiri (@FarnoushAmiri) September 22, 2026

The address then got broader, outlining Trump's foreign policy 'successes' driven by leverage, special relationships, and the persistent threat of tariffs. Pointing to Venezuela, his narrative emphasized how combining Venezuelan and US resources - accounting for "60% of the world's oil" - would help drive down energy prices worldwide.

He openly boasted after the US military invasion of Venezuela and overthrow of Maduro, "To the victor belong the spoils."

Trump on Venezuela:

When you add the United States and Venezuela together, we have more than 60 percent of the oil in the world. So, it’s perhaps the biggest deal.

It was a war, but it’s perhaps the biggest deal ever made.

To the victor belong the spoils. You’ve all heard… pic.twitter.com/Hrqu9knMtO

— Clash Report (@clashreport) September 22, 2026 Trump on Ending Ukraine War, Greenland Security Deal, & AI

On Ukraine War:

Trump claimed ending the war between Russia and Ukraine will happen "faster than people understand." He said Washington is working closely with both leaders, asserting both countries are exhausted by the conflict.

On Greenland:

"No US. adversary will ever be permitted to establish a military presence in Greenland anymore or make sensitive investments there without our express written approval. We will immediately begin the process of developing a large military presence in the appropriate locations. We’ll be building two very major military bases."

On AI:

Calling it “super intelligence”, Trump said the US rejects a “globalist scheme” to control AI.

“The use of the word artificial makes intelligence sound fake, and it is not fake,” Trump explained. “It’s actually amazing.” And then: “All of US documents will be changed to use the much more accurate term ‘super’, instead of ‘artificial’,” he said. “Welcome to the new world of super intelligence slash SI.”

Trump said the US would encourage rather than rein in the technology. “The United States leads the world in super intelligence, and we’ll continue to do so safely and responsibly,” he said. “Americans have never been a nation that retreats from a frontier or shrinks from a challenge, no matter how great or how daunting that challenge may be,” he added.

And within less than an hour after Trump walked off the UN stage: Trump signs the security agreement with Denmark and Greenland.

*  *  *

President Donald Trump is set to deliver a highly anticipated speech to the United Nations General Assembly today, set for 9:55 Eastern Time, or around 10am - though things are already running late. He's expected to address the Iran war and the "importance of ensuring that Iran never has a nuclear weapon" - according to UN Ambassador Mike Waltz, along with a other foreign policy issues like his 20-point peace plan in Gaza, as well as recent US actions closer to home in the Western Hemisphere.

Watch Trump's Full UNGA Address

High on everyone's mind is whether the US will engage in direct diplomacy with the Iranians on the UNGA sidelines.

Secretary of State Marco Rubio says the White House remains open to this.

"We’re open to that. I don’t think anything is scheduled at this point, but we’re certainly open to something like that, especially if it has the prospects of leading to something positive and ultimately achieving the goal of what this is all about," Rubio told NBC's :Today" show Tuesday morning.

"And that is the fact that Iran can never have a nuclear weapon. They just simply can’t."

A senior White House official has further previewed of Trump's speech: "He'll include many of the issues, frankly neglected by past administrations, that he’s not going to kick the can on." From there and intense, meeting-packed day will ensue, starting with:

Following his speech, Trump will join a signing ceremony with the leaders of Greenland and Denmark on an agreement that the president touted as giving the U.S. “total control” over the Arctic island’s security. Greenland and Denmark, which owns the self-governed island, framed the agreement as strengthening security and said they will need to have their parliaments ratify the terms before it goes into effect.

According to White House and UN previews of Trump's busy schedule, a series of bilateral meetings will ensue:

  • First bilateral meeting: Face-to-face meeting with U.K. Prime Minister Andy Burnham.

  • Second bilateral meeting: A "fulsome" meeting with Japan's Prime Minister Sanae Takaichi.

  • Third meeting: A discussion with Ukrainian President Volodymyr Zelensky.

  • Special event: Participation in the "Shield of the Americas" event with Latin American leaders.

More on anticipated Trump talking points:

BREAKING: President Trump's UN speech to make the case for how he uses America's power to confront Iran, cartel violence and other threats, reshaping the world to help the US, White House official tells Fox News' @WardDPatrick pic.twitter.com/oCn655rK83

— Fox News (@FoxNews) September 22, 2026

Another key meeting to be held on the sidelines will be crucial direct engagement with officials from Washington's Gulf allies, at a moment of deep wartime uncertainty lingering over the whole region. Trump has warned he could starting hitting Iran again, or else strike a deal "at any time".

Investors will be keeping an eye on US President Donald Trump’s address to the United Nations General Assembly in New York on Tuesday, as well as his meeting with Chinese counterpart Xi Jinping later in the week. Beijing is expected to offer additional rare earth export licenses as a bargaining chip at the summit, Bloomberg News reported.

Gulf leaders are also anxious over the expanding war with the Houthis in Yemen. The Saudi coalition has over the last two weeks been beaten back rapidly, impacting overland oil transit - particularly after the East-West pipeline was hit in a drone attack - and Riyadh is looking for urgent military help from its partners. So far Trump has resisted directly joining the expanded conflict.

Tyler Durden Tue, 09/22/2026 - 14:28
Tyler Durden

MAHA Leaders Warn Trump, RFK Jr. Over Inaction On mRNA Vaccines

Zero Rss
6 days 18 hours ago
MAHA Leaders Warn Trump, RFK Jr. Over Inaction On mRNA Vaccines

Authored by Zachary Stieber via The Epoch Times,

Some leaders in the Make America Healthy Again (MAHA) movement on Sept. 21 warned President Donald Trump and Health Secretary Robert F. Kennedy Jr. over their inaction regarding messenger ribonucleic acid (mRNA) vaccines, including vaccines against COVID-19.

"While the centerpiece of the MAHA and health freedom agenda has been removal of mRNA shots, you have failed to take decisive action on this front despite overwhelming credible evidence to the harm of this technology," the activists said in an open letter to Trump and Kennedy.

"Instead, your policies related to mRNA technology are neutered and self-defeating, putting pregnant women and children at risk, misleading parents and eroding their rights, and failing to help those harmed by vaccines."

They added, "If you continue to ignore our central issue of removing the mRNA platform, the MAHA and health freedom movements will withdraw their support of you, and you will face the political consequences."

The letter came after Kennedy told supporters that it takes time to make change inside the government, and that officials under him are carrying out vaccine safety studies that will inform future developments.

Dr. Mary Talley Bowden, a Texas doctor, organized the letter. She has criticized several actions by Kennedy and the officials he oversees since he became health secretary in 2025 and heads Americans for Health Freedom.

Rep. Thomas Massie (R-Ky.), former Rep. Marjorie Taylor Greene (R-Ga.), and commentator Tucker Carlson, all one-time Trump allies who have fallen out of favor with the president, signed the letter.

Other signatories include Dr. Joe Varon, president and chief medical officer at the Independent Medical Alliance; Dr. Robert Malone, who was chosen by Kennedy to advise the Centers for Disease Control and Prevention on vaccines; Leslie Manookian, founder and president of the Health Freedom Defense Fund, which has fought vaccine and mask mandates in court; and Dr. Joel Wallskog, who was injured by a COVID-19 vaccine and serves as co-chair of the vaccine injury advocacy group React19.

The coalition took exception with how mRNA COVID-19 vaccines, which Kennedy once described as the deadliest vaccines on the market, remain available for Americans. They also raised concerns about how the administration recently cleared an mRNA vaccine against influenza even though it was not tested against a placebo, which ran counter to a promise made by Kennedy that no new vaccines would be approved absent placebo-controlled trials. And they said there has been an "absence of meaningful help for those injured from the mRNA shots."

"The man who spent years warning America about mRNA vaccines now presides over a department that has approved another one," Malone and his wife, Jill Glasspool Malone, wrote in a blog post on Monday.

That is not a minor detail. It is the sort of contradiction that the medical freedom movement once would have torn apart."

Proponents of mRNA vaccines, including CDC Director Dr. Erica Schwartz, say data show they are safe and effective.

The White House did not respond to a request for comment by the time of publication.

A spokesperson for the Department of Health and Human Services told news outlets in a statement that Kennedy "has been clear that he believes mRNA products warrant heightened scientific scrutiny."

The spokesperson added: "HHS continues to support mRNA research where the science shows promise, including for hard-to-treat cancers. At the same time, HHS wound down investments in mRNA vaccines for upper respiratory viruses because the technology does not effectively protect against infection from rapidly mutating viruses such as COVID and flu."

Tyler Durden Tue, 09/22/2026 - 14:25
Tyler Durden

Goldman Warns Nightmare Refining Crisis Could Prolong Diesel, Gas Price Pain Through 2027

Zero Rss
6 days 18 hours ago
Goldman Warns Nightmare Refining Crisis Could Prolong Diesel, Gas Price Pain Through 2027

Goldman energy analyst Nikhil Bhandari warned in a note on Monday that the global refining system is too stretched to support a full recovery in fuel demand while inventories rebuild. This suggests that fuel prices will remain elevated into next year.

Bhandari told clients that refining margins must remain elevated to restrain consumption and limit restocking, keeping demand within the industry's ability to supply diesel, gasoline and jet fuel. 

On an ex-China basis, Bhandari expects 300,000 barrels a day of refining capacity additions in 2026 to be offset by 600,000 barrels a day of closures, leaving another year of net capacity losses. 

Bhandari said if demand rebounds to 1% above 2025 levels while buyers attempt to replace half of this year's inventory draws, refinery utilization would have to reach unprecedented levels. This is a territory that he said, "We do not view as operationally realistic."

To keep utilization near the highest level seen this decade, the analyst says one possible combination would require demand to remain 1% below 2025 levels and no inventory rebuilding in 2027.

In other words, an uncomfortable reality is setting in: fuel prices need to stay high enough to keep consumption subdued. 

He provided clients with three scenarios spanning different recovery paths for refinery operations and global oil demand but warned global refined-product inventories could fall even more by the end of the year, possibly to 2015 levels measured in days of consumption during the fourth quarter of 2026. 

Bhandari expanded on his refining supply-demand framework: 

Scenario 1 assumes global refinery runs back to normal levels by March 2027, followed by the resolution of Middle East refinery outages by June 2027 and Russian disruptions by December 2027, paired with a robust 2.9 mb/d recovery in global oil demand in 2027.

Scenario 2 models a prolonged disruption, delaying the normalization of global refinery runs to October 2027. Under this scenario, Middle East and Russian refinery outages remain elevated at 5.0 mb/d above seasonal norms through the remainder of 2026 and 2027, paired with a sluggish global demand growth of 0.5 mb/d. 

Scenario 3 mirrors the refinery runs and outage normalization timeline as Scenario 1, but assumes a more modest global oil demand growth of 1.5mb/d. 

Across all 3 scenarios, we assume refinery utilization of the operating fleet returns to the highest 3-month average seen over the past 5 years post refinery runs normalization (Exhibit 4-Exhibit 5). 

We note total global product inventories could fall below the lowest days-of-use levels since 2015 in 4Q26 across all 3 scenarios (Exhibit 6), and OECD product inventories (inclusive of strategic reserves) in 2Q27 could fall below their historical minimum days-of-use level last seen around 2003 (Exhibit 7).

For refiners with access to steady crude flows, tight global refining capacity could create perfect conditions of strong margins and substantial cash generation. Bhandari highlights Valero and Marathon Petroleum in the US, S-Oil and Thai Oil in Asia, and Repsol, Neste and Helleniq Energy in Europe as potential beneficiaries.

Diesel and jet fuel remain at the epicenter of the global supply squeeze. Bhandari's warning of a global refining system "stretched for longer" suggests those favorable refining economics could come alongside elevated fuel costs that would pinch consumers' pocketbooks. 

Last week, Goldman commodity experts Yulia Zhestkova Grigsby and Daan Struyven warned that the diesel crisis is setting up the next squeeze: gasoline. 

Professional subscribers can read the full note here at our new Marketdesk.ai portal. 

Tyler Durden Tue, 09/22/2026 - 14:10
Tyler Durden

Libya's Largest Oilfield Hit By New Armed Group Blockade

Zero Rss
6 days 18 hours ago
Libya's Largest Oilfield Hit By New Armed Group Blockade

By Tsvetana Paraskova of OilPrice.com

Crude oil production at Libya’s largest oilfield, Sharara, has slumped over the past day after an armed military group closed a valve on the pipeline that carries crude oil from the field to the Zawiya port for exports, in yet another global supply scare amid ongoing disruptions in the Middle East.

An armed group has closed Valve n.7 on the pipeline, Libya’s National Oil Corporation (NOC) said, adding that the closure caused a pressure buildup within the crude oil pipeline, leading to a significant reduction in production at the Sharara field.

The field is operated by Akakus Oil Operations, and its production is being shipped through the pipeline to the Zawiya port for exports.

The Libyan state oil firm warned that “the continued closure of Valve No. 7 will inevitably halt production, transportation, and export operations at the Sharara field.”

If the shutdown continues, NOC said it may be compelled to declare force majeure on Sharara output and exports.

“This would directly harm the national economy by reducing state revenues, especially given rising global oil prices, and would expose the oil transport system and its facilities to technical and operational risks,” NOC said.

The Sharara oilfield is estimated to have produced about 340,000 barrels per day (bpd) of crude oil before the incident.

Following the closure of the valve and the forced reduction of production, crude output at Sharara has now slumped to about 120,000 bpd, according to various estimates.

Libya’s fresh supply scare comes amid squeezed global oil supply as shipments through the Strait of Hormuz remain uneven and uncertain, and the Yanbu exports out of Saudi Arabia’s Red Sea coast are still offline, following the drone attack on the East-West pipeline on September 10.

Oil prices rose in Asian trade on Tuesday, following two days of declines, as the market weighs diplomacy hopes against supply-side risks.

Tyler Durden Tue, 09/22/2026 - 13:40
Tyler Durden

2Y Auction Tails As Foreign Demand Slides Despite Highest Yield In Over 3 Years

Zero Rss
6 days 19 hours ago
2Y Auction Tails As Foreign Demand Slides Despite Highest Yield In Over 3 Years

Ahead of today's auction, with yields sliding early in the day tracking the drop in oil tick-for-tick, some speculated that participants in today's sale of $69BN in 2 year notes would need a modest concession to show enthusiasm for the auction. And even though yields did push wider until the 1pm stop, it appears it was not enough and the auction was notably on the weak side.

Starting at the top, the high yield was 4.787%, a big jump from last month's 4.204% and the highest since June 24, largely thanks to last week's rate hike. To be sure, there is still some room before the 2Y takes out the generation high of 5.06% hit in 2023, but that was cold comfort to auction participants, and the auction tailed by 0.2bps the When Issued of 4.785%.

It wasn't all bad: the bid to cover was 2.627, better than last month's 2.599 and above the recent average of 2.606%. 

The internals were a touch weaker, with Indirects sliding from 66.01% to 57.79%, below the six-auction average of 58.6%. And with Directs rising to 29.0% from 23.1%, just above the recent average of 28.3%, Dealers were left with 13.2% of the auction, the highest Dealer allocation since March.

Overall this was an average auction, and while the internals were not too bad, the small tail suggested that the concession was not enough to inspire too much excitement.

Tyler Durden Tue, 09/22/2026 - 13:24
Tyler Durden

Turkish Airlines, Pegasus & AJet Cancel Iran Flights As US Sanctions Bite

Zero Rss
6 days 19 hours ago
Turkish Airlines, Pegasus & AJet Cancel Iran Flights As US Sanctions Bite

Via Middle East Eye

Turkey's national carrier, Turkish Airlines, and budget airlines AJet and Pegasus have cancelled flights to and from Iran from September 21 as US sanctions take effect, a review by Middle East Eye indicates.

The Turkish Airlines and AJet websites have no flights to Iran until March, while Pegasus appears to have removed all flights to the country from its booking system for the foreseeable future.

via AFP

Iran International reported that a Turkish Airlines representative told the channel there was no guarantee flights would resume even after March 2027.

A person familiar with the issue told MEE that US Treasury sanctions on Iran's aviation sector were so severe that Turkish carriers had been forced to suspend their flights.

The person said that while restrictions on US-manufactured aircraft, such as Boeing planes, were understandable, the new sanctions also prevented Airbus aircraft from flying to Iran because they contained American-made components. The carriers had no other choice, the person added.

A Turkish official said that as of Monday, Mahan Air was the only Iranian carrier barred from flying to Turkey, leaving other Iranian airlines free to maintain services between the two countries for now.

Turkey and Iran have maintained a stable relationship and extensive energy and commercial ties despite successive rounds of US sanctions on Tehran.

However, Turkish President Recep Tayyip Erdogan has taken a different approach since US President Donald Trump moved to tighten economic pressure on Iran.

Over the weekend, Turkey revoked the banking license of Iran's Bank Mellat, which had operated in the country for decades.

US sanctions from September 23 could cut Iranian airlines off from global aviation services, threatening flights, fuel access and airport support. https://t.co/U2USXZwjRV pic.twitter.com/2E6e57tF4F

— Gulf News (@gulf_news) September 21, 2026

Turkey's banking regulator also took over Golden Global Investment Bank last week after the US imposed sanctions on the institution for allegedly transferring funds to the Iranian government.

Tyler Durden Tue, 09/22/2026 - 13:10
Tyler Durden

Bank Stocks Slide On Resurgent Agentic Fears

Zero Rss
6 days 19 hours ago
Bank Stocks Slide On Resurgent Agentic Fears

It used to be software that was the first casualty of fears of AI disruption. Today, it's the banks.

In a generally flat (and higher for tech stocks) market landscape, banks are conspicuously underperforming today, prompting questions what's the reason for the underperformance.  

According to some traders, the reason is the market's newfound obsession with the latest shiny agentic models that are taking the world by storm.

As Goldman trader Gaelle Jarrousse writes, she is noting the agentic hit on bank and insurance stocks. She lays it out as follows: 

I took a close look at INSTINCT, the ready to use personal agent with simple chat interfaces incl what's app integration. The other one is MUSE in the US. You can ask INSTINCT pretty much everything you want from find a bottle of wine and buy it for you, gym class, restaurants bookings, travel bookings but also find an insurance products and buy it for you, ie this is a one step ahead vs Moneysupermarket for example as INSTINCT does everything for you (5 min process vs a few hours). It is like having a personal assistant. And it will find the best available deal on the market.

She notes that the pushback is do you trust it to give your email address and credit card details to buy things but as time goes by, trust will increase especially with arrival of Muse.

One month ago, the WSJ did a profile on Instinct, calling it the "Latest Viral AI Assistant Rocketing Across Silicon Valley."

A new AI assistant is rocketing across Silicon Valley.

Months after OpenClaw, the viral AI-powered assistant, captured the attention of the technology industry, a company called Instinct appears to be gaining traction among early-adopting techies.

The startup began testing Instinct in private beta in February and quickly generated substantial interest among venture capitalists, who are among its earliest users. Its popularity surged earlier this month, as users began posting about what they saw as a highly capable AI assistant that worked fairly seamlessly, a goal technologists have long considered a holy grail.

Users of Instinct can call or text the AI bot and ask it to respond to emails, manage calendars, book a ride to the airport, arrange a handyman and more. Some users have reported using it to shop for homeowners insurance or order custom merch for a wedding.

“We saw someone buy a house on the platform. A lot of our younger users are using it to find apartment rentals,” Shinn said. “It’s a one-stop shop to do almost everything.”

Going back to Goldman, Jarrousse writes that we saw some early sell off in Telcos on the theme at the end of last week and we are seeing US banks and insurers down on the same theme today.

"I will pay attention to this and i started to get questions yesterday as a potential trigger for some profit taking in insurance esp when looking at the high valuation of Allianz which is a sector proxy."

She shares some additional color below: 

See table below, which is our best estimates based on company data, of Motor and non-motor exposure. The Nordics screen the highest on P&C exposure with Sampo, Tryg and GJEN at the top of the table. Admiral is the one of the pure play on the theme although we can argue that the UK is already very competitive. Amongst the multi liners Generali is at the top given retail P&C exposure followed by Allianz.

Looking at banks, KBC is the biggest P&C with about 20% of insurance revenues. Caixa and Intesa have 3-4% of P&C insurance exposure and I would argue that Italy and Spain are ripe for disruption on other products as well from deposits to asset management given high upfront fees, low betas. Historically the Irish have been weak each time agentic/ deposits competition kicks in and ING can come in the debate too given high L/D, deposits structure, positioning and NII expectations.  Outside of agentic, I am also bearish on Caixa given risk of short term NII disappointment due to deposits repricing vs time lag in asset repricing and a valuation at 2.5x P/TE. So overall I will be cautious on rates sensitive banks here  and Greece and Lloyds/ Natwest are now my only longs. On the Platforms, we have some constructive feedback from Italian trip and Munich conference on FINECO and FLATEX (see below) and I feel less concerned about those from an agentic disruption angle as they are the disruptors to incumbents and cash sitting on those platforms is meant is to be deployed/ invested. 

Goldman's US Financials specialist, Christian Degrasse, also confirmed that while he was seeing plenty of debate & inbounds coming in on sectors where price action is more muted today, a common starting point appears to be interaction with the consumer... with AGENTS are the primary focus...

...largely on businesses with Consumer Touch points as the market prices in risk that agents narrow the ability for companyies to monetize the consumer, and also change the landscape re lead generation & marketing .. this all comes amidst greater excitement around Muse + other agent products - and GS' Consumer Inertia basket (GSXUSWCH) is one of our most actively traded baskets in recent sessions .. 

There was some chatter yesterday on personal insurance (ALL), with focus today broadening out to Personal Insurance peers (PGR, TRV etc), Lead generators (investors have pointed to a couple of small cap insurance lead generators down HSD % - LDD %), Insurance Brokers (GSHD u/p peers 2 days in a row), Wealth Managers & Retail brokers (SCHW LPPA AMP RJF).. Banks are also trading heavy, and feedback here is debated – but focus does remain on banks with business mix geared towards the Consumer (Consumer deposits, wealth management) – which may explain from a high level the relative outperformance in smid banks (which in aggregate have less fee businesses like wealth + greater mix in commercial deposits) vs large banks – though positioning & liquidity may also potentially playing a part in todays volatility.

Payments … entered today where convos were very comfortable around V MA’s positioning on Agentic, and how integrated card was into present agent capabilities … Some questions here around whether the late morning underperformance is either 1) flow of funds driven (ie selling of liquid & owned financials) or 2) any worries around more direct wallet integration following announcement of a PYPL partnership (most feedback thinks #1 so far but welcome to views)

As we move into the afternoon – price action is somewhat indicative of investors in fins broadly pulling back & getting incrementally more defensive (with positioning starting to play a greater role in dispersion) … Signs = CBRE & JLL underperforming peers by ~2% (two popular names in real estate among Financials specialists), 2) large/liquid & defensive names viewed as (per feedback) having good tech (JPM) and/or well positioned on agentic (V MA), or more weighted towards commercial exposure (ie insurance brokers) trading heavy, 3) choppy underperformance across various sectors without direct agent reads (ie exchanges) ... In our view, this is all indicative of 1) the market pricing in a ‘uncertainty discount’ as investors potentially try to get up to speed on implications (risk/reward) on fundamentals, and 2) the market’s cognizant that in past choppy tapes that dealt with AI, it was better to be more patient rather than defending day 1 …

on that note, Mitola highlights volumes are High and we’re seeing 1) an uptick in thematic trading and a willingness to press names where an "agentic economy" presents a potential headwind & 2) a complete buyers strike with no signs of defense across the sector, similar to previous episodes YTD (AI risk, Perpetual Futures, etc) .. 

For now software, where shorts got badly burned after the recent surge, is insulated but as agents make a fresh push for attention - and disintermediation of traditional applications, how long before the pain returns? 

Tyler Durden Tue, 09/22/2026 - 12:55
Tyler Durden

Texas Governor Orders Halt To New Data Centers Weeks After Issuing Moratorium

Zero Rss
6 days 19 hours ago
Texas Governor Orders Halt To New Data Centers Weeks After Issuing Moratorium

One month after Texas Governor Greg Abbott ordered a pause on Texas data center approvals pending an audit, overnight the governor doubled down and ordered the state’s environmental watchdog to withhold permits for new data centers until an audit of risks to the power grid is complete.

No authorizations can be given until the Electric Reliability Council of Texas, or Ercot, completes its review, Abbott said in a statement on Monday.

Gov. Abbott directed the TCEQ to halt any new permits authorizing data center projects until ERCOT completes its audit.

No state agency shall move forward with approvals related to the development of data centers until that information is acquired. pic.twitter.com/MG2s0EKf8x

— Governor Abbott Press Office (@GovAbbottPress) September 21, 2026

This matters a lot for the US data center rollout because as the chart from Apollo below shows, Texas is home of one-fifth of the US’s data center pipeline in terms of IT power capacity, by far the largest of any single state.

In his statement, Abbott said that data center projects must prove they can cover all electrical infrastructure costs, use no water needed by local communities, and result in lower bills for households. The governor also said he would work with state legislators to eliminate any financial incentives for the hubs.

The governor is doubling down on an effective moratorium on new AI hubs amid concern that the vast sites are compromising the state grid and water resources. The proliferation of data centers is set to be a key issue in midterm elections in November, with President Donald Trump’s enthusiasm for expansion coming up against mounting public concern, mostly due to soaring power bills.

The permitting halt comes amid growing opposition to data centers across the US. Some 45 projects, worth $68 billion, were blocked or delayed by local pushback between April and June, according to research group Data Center Watch. Trump, meanwhile, has sought to drive the industry forward, warning that a slowdown could offer China an advantage in the AI race.

Texas, the biggest US energy powerhouse, has until now been at the forefront of the AI boom, but it has also struggled to connect data centers to the grid. As we reported at the time, Abbott last month ordered Ercot, along with the Public Utility Commission of Texas, to audit all data centers in the grid queue before issuing further approvals. Regulators subsequently set a mid-December deadline for project reviews.

Tyler Durden Tue, 09/22/2026 - 12:40
Tyler Durden

Ed Dowd: The Fed Hiked Interest Rates Into A Supply Shock

Zero Rss
6 days 20 hours ago
Ed Dowd: The Fed Hiked Interest Rates Into A Supply Shock

Authored by Ed Dowd: Beyond the Narrative via Substack,

September FOMC Meeting: First Rate Hike Since July 2023

The FOMC did what the front end of the Treasury market (3-month T-bill) had been telegraphing for two weeks prior. On September 16 they voted unanimously to raise the fed funds rate 25 basis points to 3.75-4.00 percent. Kevin Warsh's press conference was short, blunt, and deliberately light on forward guidance. He said economic activity is expanding at a solid pace, job gains are keeping up with the workforce, unemployment is little changed around 4.1 percent, and inflation remains elevated. He argued the hike "will support a timelier return" to the 2 percent goal and "This Committee will deliver price stability." He did not submit his own dot. The rest of the Committee's median projection for fed funds now sits at 4.1 percent at year end and stays there through 2027. They mentioned inflation risks are to the upside and that labor risks are roughly balanced. Geopolitical shocks and commodity prices got a mention, but they hiked anyway.

Why Did They Hike?

The day before the meeting I posted on X that starting September 2 the 3-month T-bill yield had moved above our simple Fed-funds-rate/T-bill model. Historically the Fed follows the market more than the market follows the Fed. The signal pointed to a minimum 25 basis-point move, with 50 not being out of the question. Politics could have intervened, after all this is right before the midterms, but the Committee chose to follow the tape. They chose 25 but the T-bill market yield of 4.09 said 50 would have been the cleaner signal. The market two weeks before the decision, in my opinion, was starting to discount the energy and commodity shock as something more durable than a temporary disruption. The war is not wrapping up on a convenient political calendar. The Iranians have little incentive to resolve it before November. A war sold as a two-week excursion will be 8 months old by the beginning of November. When a supply shock starts looking structural, the front end prices a higher terminal rate even if the underlying demand picture is deteriorating. That is exactly what happened. Essentially the market priced in a very high probability that there is almost no chance of a deal until after November with energy prices remaining higher and going up.

Was Hiking The Right Move?

Hiking into a supply shock is rarely the right medicine. Rate policy cannot produce more oil or more shipping capacity. It can only crush demand. The Committee knows this...Warsh even said they cannot control individual relative prices. They hiked anyway because they decided they were not yet confident that underlying inflation was moving toward 2 percent "clearly and at sufficient speed." Fair enough as a credibility statement. The problem is the data they are using to measure the other side of the mandate.

Payroll numbers have been inaccurate for years. We have been documenting this. BLS initial prints systematically overstated job growth; the QCEW and subsequent revisions have been carving hundreds of thousands of phantom jobs out of the record. The composition of the remaining "gains" is even more telling. Healthcare has been doing the heavy lifting while manufacturing, information, finance, professional services, and retail have been losing ground. That is not a robust, broad-based labor market. That is an economy being papered over by one sector and by earlier distortions that are now fading.

Housing is already rolling over. Starts and permits plunged again in August. Homebuilder confidence is near COVID lows. Months of supply are sitting near the 2006 peak. Real house prices are declining, led by multi-family. The border tightening removed a floor that illegal inflows had put under rents and home prices. Housing is a huge chunk of CPI and of household balance sheets. It does not look like a strong demand story. Layer on the AI complex: AI and AI-adjacent names are now 40-45 percent of S&P market cap, with massive public and private debt issuance behind the buildout. Institutional investors cannot diversify away from it. Private credit is growing its defaults in the dark and seeing outflows. Enterprise buyers are starting to ask about ROI. The MSM is starting to notice all the risks. Finally China is another risk sitting in plain sight with construction output collapsing, decades of housing supply, fixed-asset investment falling, and no clean export valve left. That does not stay contained.

The Table Is Set

So we now have a Committee that just removed a dose of accommodation into a supply-driven inflation impulse while the demand side of the economy is already softer than the headline payrolls suggest. Housing is weak. The AI trade is crowded and levered. China is an acute problem. That combination has a name: policy error. Not because they raised 25 instead of 50 but because they are treating a supply shock as if it were a classic overheating demand problem and they are doing it with lagging, revised, and compositionally misleading labor data. The market has provided false signals in a rate cutting cycle before and in my opinion the Fed should have looked through the supply shock and past the blatant unwillingness of the Iranians to come to the table before the midterms. They will likely hike again another 25 bp but holding rates steady and waiting would have been more prudent.

The cycle has not changed. Easy-money periods juice activity...sometimes with genuine investment and sometimes with fraud. Tightening and then the eventual easing cycle is when the previous juice gets exposed. We have seen the movie. The current episode has its own flavor: government deficit spending, labor-force distortions, an unprecedented illegal alien sugar high, speculative AI capex boom, an opaque private credit shadow banking complex and now a geopolitical supply shock layered on top. The Fed is late, as usual. Once they reverse course and start cutting again it will be into an accelerating slowdown. It will be too late as anything they do from here will take 12-18 months to hit the real economy. The next year is going to be tumultuous.

Ultimately rates are coming down, not because Warsh suddenly turns dovish, but rather because the real economy is already weaker than the official series admit and the lagged effects of tighter policy will show up in employment, housing, and credit. When that happens the Committee will discover, yet again, that they were fighting the last war with the wrong map.

* * *

Tyler Durden Tue, 09/22/2026 - 12:20
Tyler Durden

All 10 ActBlue Witnesses Take The Fifth As GOP Says Probe Is "Far From Over"

Zero Rss
6 days 20 hours ago
All 10 ActBlue Witnesses Take The Fifth As GOP Says Probe Is "Far From Over"

All ten ActBlue employees and board members deposed by House investigators have invoked the Fifth Amendment rather than answer questions about the Democratic Party's dominant fundraising platform. Five of the ten are board members, all deposed in the past five weeks, and the three committees running the probe say they are not done. Their third report, released last week, alleged ActBlue accepted a substantial volume of foreign and fraudulent donations with minimal scrutiny.

ActBlue CEO Regina Wallace-Jones prepares to testify before the House Administration Committee in June. (Tom Williams/CQ-Roll Call/Getty Images)

The investigation's third report, released last week, alleged ActBlue accepted a substantial volume of foreign and fraudulent donations with minimal scrutiny.

It builds on the first report, released in April 2025, which found that ActBlue skipped standard verification steps such as CVV checks, identified at least 22 significant fraud campaigns, and documented 237 prepaid-card donations from foreign IP addresses in a single month before the 2024 election.

Investigators found that skipping those checks opened the door to smurfing, the practice of dressing up one illegal mega-donation as a parade of small contributions filed under real people's names. ActBlue's much-touted "passport verification" process appears to have checked nothing against any government database. Fraud analysts inside the company faced pressure to wave through foreign-flagged donations, in one case clearing a donor on the strength of a LinkedIn profile.

House Oversight, House Administration, and House Judiciary are still working the case now, and none of them show signs of backing off. "Whether it's allowing fraudsters to steal taxpayer dollars or accepting illegal foreign donations through ActBlue, Democrats have proven themselves to be the party of fraud," Oversight Chairman Rep. James Comer told Fox News Digital. "Our investigation into ActBlue is far from over. We expect more documents and testimony in the weeks ahead."

Republicans have complained about ActBlue's verification standards for years, and the company insists it has tightened those safeguards since the investigation began. That claim falls apart against the committees' own findings. The report says ActBlue took "a more lenient approach" to fraud prevention in 2024, after Steil first questioned its practices in October 2023, and the internal records released last week show employees approving donations despite unresolved red flags about the money's origins.

ActBlue still denies wrongdoing and has given no indication it plans to return any flagged contribution.

"ActBlue's own admissions raise serious questions about its fraud prevention practices, including a so-called passport verification process that did not actually verify or check entries against any government database," Committee on House Administration Chairman Rep. Bryan Steil told Fox News Digital on Friday. "All options are on the table to ensure we get to the bottom of what is going on at ActBlue."

A spokesperson for Judiciary Chairman Rep. Jim Jordan confirmed to Fox News Digital that the panel "will continue aggressive oversight of ActBlue, including additional depositions."

Co-founder Matt DeBergalis was among the ten who took the Fifth, and CEO Regina Wallace-Jones did the same during a public hearing. In a letter to Steil cited by the report, she claimed donors with non-U.S. addresses must submit a passport number to get verified. The GOP report picked that claim apart, noting the system only confirms the number contains the right count of characters, not that it belongs to an actual passport.

In one internal ActBlue memo, a donation with a Hong Kong IP address was described as a "great accept," reasoning that none of the donor's other signals raised eyebrows. Another argued a previously denied contribution should have gone through because the name, email, and billing address all lined up, even though it was a foreign contribution. A supervisor waved through a donation that had set off a lot of alarms because the donor deserved the benefit of the doubt. In one case involving a Missouri billing address with every sign pointing to Canada, an analyst approved the donation because "Twitter seems to confirm that they are a real person."

Now the National Republican Congressional Committee wants House Democrats to cut ties with ActBlue. "House Democrats cannot claim ignorance while continuing to rely on a fundraising platform facing serious allegations," NRCC spokesman Mike Marinella said. "The National Republican Congressional Committee officially calls on every House Democrat to cut ties with ActBlue and return any illegal contributions funneled to their campaigns through the platform." Asked whether it would return any donations, ActBlue pointed back to its own statement instead of answering the question.

"There's nothing to see here," ActBlue said, arguing a third-party forensic analysis had undercut a central GOP claim and accusing Republicans of "orchestrating another political stunt before rushing out of town weeks early to go campaign." That review of ActBlue's 2023 data found 99.99% of contribution dollars came from donors who gave a U.S. address or a passport number, according to the company's release, though it did not test whether either was genuine. The company framed the entire affair as an effort "to silence organizations they believe threaten their agenda."

* * *

Tyler Durden Tue, 09/22/2026 - 12:00
Tyler Durden

Iran's Fars Calls Reuters' Hormuz Reopening Story "Invalid" Ahead Of Trump's UN Address

Zero Rss
6 days 20 hours ago
Iran's Fars Calls Reuters' Hormuz Reopening Story "Invalid" Ahead Of Trump's UN Address

Update:

  • Iran's Fars Rejects Hormuz Reopening Reports As Brent Slides <$100 On Diplomatic Hopes
  • Brent Tumbles On US Media & Aligned Outlets Pushing Rumored Diplomatic Efforts 
Iran's Fars Rejects Reporting 

Kyodo and Reuters published positive diplomatic headlines early Tuesday morning that sent Brent crude futures tumbling below $100 a barrel, but Iran's semi-official Fars News Agency denied them.

Kyodo and Reuters, citing Iranian sources, reported that Tehran could reopen the Strait of Hormuz within seven days if Washington eased US naval pressure on the Hormuz chokepoint and lifted its blockade of Iranian ports.

Fars called those two reports "invalid and incorrect."

Despite Fars' rejection of the reporting, US media and aligned outlets focused this morning on rumored diplomatic efforts to resolve the conflict ahead of President Trump's United Nations General Assembly address later today.

Brent crude remains below $100.

Brent Tumbles Below $100 After Report Says Iran Offers To Reopen Hormuz Chokepoint

Brent crude futures tumbled early Tuesday, as much as 3%, and slid below the $ 100-a-barrel level to the low $98 range after reports that Iran offered to reopen the Strait of Hormuz within one week if the Trump administration begins easing naval pressure in the critical waterway and ends its blockade of Iranian ports. 

Tehran conveyed the proposal through intermediaries as part of efforts to revive negotiations and end the conflict, Kyodo News reported, citing a senior Iranian government official. 

The offer calls for the US naval blockade of the critical waterway and Iranian ports to end in exchange for reopening the strait. This comes as Treasury Secretary Scott Bessent's economic war against Tehran has ramped up (read latest). 

Here's more from the Japanese outlet:

The proposal, which has already been conveyed to Washington through mediators, calls for renewed talks aimed at reaching a permanent end to hostilities between the two countries, the official said.

Tehran plans to use the U.N. General Assembly gathering this week in New York to consult with countries acting as intermediaries.

The official ruled out a meeting between Iranian President Masoud Pezeshkian and U.S. President Donald Trump on the fringes of the gathering, but said progress toward an agreement remains possible.

"There is a possibility of moving toward an agreement," the official said, while adding that Washington must demonstrate "seriousness and commitment" if diplomacy is to advance.

Iran is seeking signs from Washington that it is prepared to return to negotiations and take steps toward an end to the U.S. military blockade of Iranian ports and a halt to military operations related to the Strait of Hormuz, the official said.

If such steps are taken, Iran is prepared to reopen the strategic waterway within seven days and return to the negotiating table, according to the official.

Hamad Hussain, senior climate and commodities economist at Capital Economics, was quoted by Reuters as saying this overnight development is a positive sign that diplomatic efforts may be working.

"There may also be other obstacles, such as the issue of tolls and fees, to overcome before a lasting solution can be achieved," Hussain added.

Later this morning, President Trump will address the United Nations General Assembly and meet with world leaders, likely discussing the Gulf conflict and Russia's war in Ukraine.

Despite another exchange of threats between Washington and Tehran on Sunday, Trump said he was open to meeting Iranian President Masoud Pezeshkian this week at UNGA. An Iranian official subsequently told Reuters that no direct meeting would take place. 

Diplomatic movement appears to be happening under the surface to resolve the US-Iran conflict and the global diesel crisis. However, Ole Hansen, head of commodity strategy at Saxo Bank, does not expect much downside in Brent prices until transits through the maritime chokepoint increase, particularly shipments of refined products, where the real energy crisis lurks ahead of the Northern Hemisphere winter.

* * *

Tyler Durden Tue, 09/22/2026 - 11:55
Tyler Durden

Gamma Squeeze The World

Zero Rss
6 days 20 hours ago
Gamma Squeeze The World

 Submitted by QTR's Fringe Finance

A little over a week ago, I wrote about Leopold Aschenbrenner returning to markets, and the ensuing nausea the entire spectacle caused me.

For those who missed it, Aschenbrenner’s Situational Awareness fund had grown to roughly $45 billion before getting absolutely smoked in July, falling toward $10 billion and forcing the liquidation of most of its public equity portfolio to Darth Griffin over at Citadel. Then, barely six weeks later, CNBC reported that Situational Awareness was back, this time buying options tied to AMD, Bloom Energy, CoreWeave, SK Hynix, SanDisk and the Roundhill Memory ETF.

The media slobbered over these options buys like it wasn’t the exact same thing a million 19 year olds do on their Robinhood app and post to r/WallStreetBets every day.

In my piece, I noted that maybe Aschenbrenner really is brilliant about AI, but understanding scaling laws and compute doesn’t automatically make somebody a great portfolio manager. His previous strategy looked to me like nothing more than an enormously concentrated, leveraged bet on the hottest momentum trade on Earth, one that generated spectacular returns right up until it imploded into itself like a dying star.

Today let’s add another piece to the puzzle. For years I’ve argued that the modern stock market increasingly resembles a gigantic mechanical contraption driven primarily by passive flows, options positioning, dealer hedging and gamma. The marginal price of a stock isn’t necessarily being set by some guy with a green visor carefully discounting the next 20 years of cash flows.

Increasingly, instead, it can be set by flows interacting with flows interacting with algorithms, while CNBC brings on an analyst afterward to explain why it was actually because Jensen Huang signed some nubile Taiwanese woman’s tit at a tech conference in Asia that week.

And ever since GameStop, I’ve wondered, and I want to emphasize that this is my speculation, not something I can prove, how often enormous options purchases are being used to manufacture or accelerate momentum underneath the surface of the market. I’ve asked this question specifically related to the NASDAQ and Tesla multiple times, dating back to the early 2020s.

Archegos’ Bill Hwang, for example, used highly leveraged derivatives to create massive synthetic exposure, whose buying pressure pushed stocks higher, increased his collateral and borrowing capacity, and funded even more derivative exposure, creating a self-reinforcing feedback loop. Until it all went to shit.

Buy enough calls and somebody has to sell them to you. Depending on how dealers are positioned, those dealers may hedge by buying the underlying stock. If the stock rises, the delta of the calls can rise with it, requiring additional hedging. Momentum strategies notice the move. Humans see a chart going vertical and pile in. Suddenly you have a feedback loop.

Which brings us to yesterday. Literally hours after the Federal Reserve raised rates 25 basis points to 3.75% to 4.00% on the largest debt bubble in history, its first hike in three years, the Nasdaq Composite exploded almost 3% higher.

Sure. Why not? There were legitimate explanations offered for the rally. Treasury yields declined, oil fell and enthusiasm around AI came roaring back. Fine.

But the timing caught my attention because shortly before this move, Situational Awareness had reportedly returned to the options market buying exposure to precisely the kind of AI, semiconductor and memory names capable of lighting up the Nasdaq.

So it was easy to ask: is Leopold responsible for Monday’s rally? Was it nothing more than a gamma squeeze? I have absolutely no idea. And neither does anybody else without seeing the complete positioning and dealer books. But facts have started to leak out. For example, Zero Hedge noted it was META’s highest call volume on record yesterday:

But the circumstantial setup is interesting enough that I’m paying attention. It also fits the same suspicion I’ve had about this market for years: what looks like fundamental price discovery may sometimes be something considerably more mechanical.

And one of the stranger things about Monday was volatility. Normally a violent equity rally is associated with falling implied volatility. When stocks and implied volatility rise together, however, it can indicate unusually strong demand for optionality, including upside calls, rather than the familiar slow risk on grind.

That doesn’t prove a gamma squeeze and it doesn’t prove manipulation. But it makes me less inclined to look at a giant green Nasdaq candle and conclude that millions of investors independently woke up Monday morning, opened their discounted cash flow models and simultaneously discovered that stocks were worth 2.3% more.

I’ve said for years that I think the market is, in a colloquial sense, rigged. I don’t mean somebody is sitting in a smoke filled room deciding where the Nasdaq closes. I mean the structure of modern markets can create enormous self reinforcing moves that have very little to do with the fundamental value of the underlying businesses. (Read: What If The Automatic Stock Buying Stops?)

And reflexivity works both ways. The same machinery capable of turning call buying, dealer hedging and momentum into a face ripping rally can amplify the move when everybody heads for the other side of the boat.

🔥 85% OFF FOREVER IF YOU SUBSCRIBE TODAY: I am again offering an 85% discount to anyone that wants to become a Fringe Finance annual subscriber today. It’s a discount you can keep and stays applied for as long as you wish to remain a subscriber: Get 85% off forever

None of this changes my broader thesis. I still think the AI bubble is likely to crack within the next six to ten months. Monday doesn’t change that view one bit.

You can gamma squeeze stocks. You can buy calls. You can trigger systematic flows. You can squeeze shorts and chase indexes higher. What you cannot do indefinitely is repeal mathematics.

The risk free rate is around 4%. The Fed just raised rates. Capital has a real cost again. Inflation remains elevated. Those realities eventually matter to companies whose valuations depend on enormous amounts of capital spending and profits stretching years into the future.

I continue to think we’re eventually headed toward a powerful deflationary impulse as this cycle breaks. If I’m right, all of this options driven gamesmanship will eventually look like a sideshow.

Oh and one last thing. Watching Aschenbrenner’s enormous concentrated bets, spectacular rise, violent drawdown and rapid return to leveraged instruments gives me Bill Hwang vibes. To be crystal clear, I am not accusing Aschenbrenner of fraud, illegal manipulation or any of the conduct associated with Hwang. I’m talking strictly about the market dynamic: enormous concentration, leverage, extraordinary mark to market gains, sudden losses and the possibility that positioning itself becomes meaningful to the prices of the securities involved.

The analogy ends there.

My warning to subscribers remains the same: do not confuse the price blinking on your screen with some immutable statement about economic reality.

This isn’t the stock market of the 1980s or 1990s. We now have zero day options, enormous passive vehicles, algorithmic strategies, volatility products, dealer gamma hedging and trillions of dollars responding mechanically to price.

After more than a decade of zero rates, QE and monetary intervention, I increasingly think we’re staring at a financial mirage, a fiat driven, QE induced hallucination where price temporarily becomes its own justification.

Nothing feels particularly real anymore.

But that’s the funny thing about a mirage, it all looks perfectly real right up until you try to drink the water.

--

QTR’s Disclaimer: Please read my full legal disclaimer on my About page here. 

Tyler Durden Tue, 09/22/2026 - 11:40
Tyler Durden

Socialist Candidate Says Stealing From Taxpayers Makes Her "More Qualified" For Office

Zero Rss
6 days 21 hours ago
Socialist Candidate Says Stealing From Taxpayers Makes Her "More Qualified" For Office

It sounds crazy, but this kind of scenario is absolutely the norm for Democratic Socialist candidates:  Being convicted of blatant criminal embezzlement is a badge of honor, not a disqualifying mark on their record.  The complete inversion of moral standards is unsettling and it reinforces the need to prevent far-left activists from entering positions of local government.

Denver mayoral candidate, Shontel Lewis, stole thousands of dollars in EBT funds while working in the state food-stamp office in 2008.  She says that the experience actually makes her "more qualified" for the job of mayor, ostensibly because this makes her more attuned to the needs of "struggling Denver citizens".  

But maybe struggling Denver citizens should not be the deciding factor in who runs the city?  Perhaps electing a thief to office will make their lives worse, not better.

Investigators identified seven benefit accounts Lewis accessed over five months while working at the state food-stamp office. She reissued EBT cards from other people’s accounts and gave the funds to her roommate (and used some herself). She originally faced felony charges, pleaded guilty to misdemeanor theft, served 18 months of probation, and later said she paid restitution in full.    

Colorado's constitution restricts anyone convicted of "embezzlement of public moneys, bribery, perjury, solicitation of bribery, or subornation of perjury” from holding “any office of trust or profit in the state.”  However, Lewis has been snaking past these rules for years.  Similar concerns were raised when she ran for the Regional Transportation District board in 2018.  

At that time she lawyered up and successfully obtained a position on the board from 2019 to 2022.  Keep in mind, Colorado is a deep blue state run by progressive fanatics, and this was the era of DEI and BLM supremacy.  Lewis has continually blamed her circumstances for the theft, claiming she was spurred on by "trauma".

“I believe my eligibility should be based on the voters, not on a series of poor decisions I made over a decade ago at a time of trauma in my life,” she said in a statement to The Colorado Sun. 

Lewis is now a member of the City Council.

This is a typical strategy for leftists, apologizing for a crime while not truly taking accountability and blaming circumstances.  Millions of people go through "trauma" and hardship everyday, and they don't steal.  The fact that the thefts occurred while Lewis was working in a state office makes her continued presence in government all the more concerning.  She used her trusted position to gain access more easily. 

Her theft record and socialist politics also bring up the question of how she will handle crime in Denver? 

Lewis talked in circles when asked whether she would defund the police to pay for pricey proposals like youth programming and city-owned affordable housing. She criticized the cuts Denver mayor Mike Johnston made to a wide range of services to bridge a $200 million deficit in the latest budget, cuts she said could have come from the Denver Police Department (DPD). 

"Yes, cuts did need to be made, but I think there's an opportunity for us to always prioritize the people when we're talking about our budgets....We missed an opportunity to go back to those that were represented with DPD, with our Department of Safety, where we didn't actually see any cuts coming from the department."

Typically, far-left politicians refuse to enforce prosecution standards and tend to impede law enforcement operations at every turn.  In some cases, these city leaders have even been caught manipulating stats in order to hide rising crime.  They don't have to commit crime themselves; all they have to do is make crime easier for other miscreants. 

It's not surprising that many socialist candidates tend to come from the national underbelly - DSA and their Democrat allies openly celebrate criminality as a lifestyle choice, and view morality as purely relative.        

Tyler Durden Tue, 09/22/2026 - 11:20
Tyler Durden

Putin Urges Immediate Yemen Ceasefire In Call With Saudi Crown Prince

Zero Rss
6 days 21 hours ago
Putin Urges Immediate Yemen Ceasefire In Call With Saudi Crown Prince

Russian President Vladimir Putin held a Monday telephone conversation with Saudi Crown Prince Mohammed bin Salman (who is also the prime minister) - wherein the two leaders focused on broad bilateral issues.

Referring to the "Saudi National Day", a TASS readout indicates "The Russian leader congratulated the Saudi Crown Prince on the upcoming national holiday - the day marking the founding of Saudi Arabia - noting that a century ago, the Soviet Union was the first foreign nation to recognize the Saudi Kingdom."

Aside from the usual boilerplate expressing satisfaction on the bilateral relationship on multiple fronts, the two addressed the ongoing crisis in the Middle East, where the Iran conflict has spilled over into Yemen this month.

Per the readout, MbS and Putin agreed that that there is "no alternative to political and diplomatic efforts aimed at normalizing the current crisis, while duly taking into account the interests of all parties."

Putin urged every effort to achieve a ceasefire, and to avoid escalation:

"In light of the deteriorating military-political situation in Yemen, the need for an immediate cessation of hostilities and the creation of conditions for launching a constructive intra-Yemeni dialogue under UN auspices was reaffirmed. At the same time, the importance of ensuring the safe and unhindered passage of vessels through international waterways in the region - including the Strait of Bab al-Mandeb Strait and Strait of Hormuz - was emphasized," the Kremlin said.

Moscow and Riyadh agreed continue communication at various levels, and work on stability in the region.

While Russia is not involved in the Yemen conflict, it does provide military supplies and conducts trade with Tehran, and so may have some leverage in terms of pushing the Islamic Republic to get the Shia Houthis to the peace table.

The Yemen conflict could yet spiral into something more serious, and could draw in especially the Pakistanis after Riyadh and Islamabad inked the Mecca Defense Pact this summer.

Earlier this month: Saudi Arabia is learning a lesson that money and American weapons could never erase: you cannot buy your way out of geography.

This week, the Houthis expressed openness to a comprehensive ceasefire deal, but have also emphasized that the Saudi siege of Houthi-controlled areas must halt for this to be a possibility. The Yemen war and threat to Saudi oil infrastructure has only served to increase Iran's leverage over global energy, amid the ongoing Strait of Hormuz crisis and standoff with US forces.

Tyler Durden Tue, 09/22/2026 - 10:45
Tyler Durden

"Repeated And Persistent Supply-Side Shocks" Are Here To Stay

Zero Rss
6 days 21 hours ago
"Repeated And Persistent Supply-Side Shocks" Are Here To Stay

By Michael Every of Rabobank

Chicago Fed President Goolsbee just warned the FOMC can’t ignore repeated and persistent supply-side shocks and must respond in a way that will cause economic hardship. However, repeated and persistent supply-side shocks are now the norm, not short-lived, aberrant events.

Putin won the Russian election with a supermajority: fears are escalation is imminent via sabotage in Europe, mobilization, or provocations to NATO. The FT notes a Kremlin-backed forgery scheme moved $6.9bn through global banks, as diplomats blamed France for an EU deal to renew 3,000 Russia sanctions listings lapsing. Trump pressed Zelenskyy to stop hitting Russian refineries, stressing it’s about “diesel, diesel, diesel.” CIA boss Ratcliffe also met with him. Trump additionally announced a “massive” Belarus potash deal to undercut trade with Canada, yet will open two new military bases in Greenland, which Russia will see as a provocation. 

Iran, on high alert, threatened to use new weapons vs. new targets if the US escalates. The US says anyone servicing Iranian airlines will be cut off from the dollar system from tomorrow. Gulf states are urging a reset with Iran yet are elsewhere reported to be planning joint military action with the US and Israel. The Houthis are pushing for control of Yemen’s highlands as Trump is said to have called off strikes, likely to keep pressure on the Saudis to join a bigger push. The UK is offering to help the Saudis via air-to-air refuelling, which isn’t much direct help even if it places the UK on the Houthis hit list: PM Burnham has made longer public statements on how to refuel via a cup of tea than on this issue. The EU’s Kallas and Italy urged the EU to reinforce its Red Sea Aspides naval force, as nearby seven Ethiopian rebel groups formed a new anti-government alliance, worsening the geopolitical picture further. 

Despite two more tankers being hit, oil is flowing from Hormuz, expensively, and refined products aren’t, making them even more expensive. With VLCC oil tanker daily rates top $1.2m vs. a normal $40,000 - $100,000 and order books are constrained by global shipyard capacity, commodity trader Trafigura just launched a new ocean carrier of its own, Volare Shipping. The US is proposing a $5bn kickstart fund to rebuild Gulf energy sites, but the war must be won first; and global oil and gas discoveries have just hit a 40-year low on investment cutbacks. 

Germany announced limited fuel price caps and fuel-tax suspensions, France is pushing for similar emergency action on energy prices, and US Republicans are calling to halt diesel exports. The latter wouldn’t be a lasting solution to higher US prices if markets operate freely in an integrated global system, but a hypothetical invocation of the Defence Production Act to ‘manage’ refineries and a geopolitical closed-loop trading bloc could work such that some have much lower energy prices, others much higher ones.

At which point, consider if we are seeing global bifurcation into blocs, why should the energy sector operate as a ‘one world’ system? Why wouldn’t it be bifurcated to benefit those with energy vs. those without? “Because markets?” Why? “Because war?” Those without energy surrender, not fight. Also note if one holds the Americas’ and Middle East’s oil production and refining, one effectively controls oil; and if one holds the Americas’ and the Middle East’s are on fire, then in *relative* terms, the Americas are winners… and many others are the losers.

Meanwhile, the US coast guard is watching a Chinese marine presence off Alaska, as the US, Japan and South Korea launched joint economic-security talks before the Trump-Xi summit. 

Ahead of it, Chinese rare-earth shipments have dropped 20% month-on-month, showing Chinese leverage. Yet USTR Greer suggested the US could support a bilateral trade truce extension of just 3-6 months rather than the end-of-Trump term China wants. That suggests the US has cards to play ahead. Vietnam is also saying a US trade deal is close and denied it is a transhipment hub for Chinese goods. Watch that space closely.

Despite the headlines, perhaps pay less attention to Canada extending an easy-to-say-hard-to-deliver ‘unique relationship’ offer from the EU to the UK,… and to Brazil and Kenya. That’s likely to prove emotionally appealing, realpolitik-naïve middle-power gobbledy-‘BEUKCUK’. Indeed, Mexico is close to agreeing to buy more US goods and fewer from other countries under a new USMCA. That weakens Canada’s negotiating position along with the US-Greenland security deal and the one for Belarussian potash.  

Against that bifurcating backdrop, the ECB rolled out a digital euro in wholesale financial markets via its new Pontes (“bridge”) scheme for banks. This new pipe in Eurozone financial plumbing allows tokenised asset transactions to settle using money issued by the ECB, where private distributed ledger technology platforms can now access the Eurosystem's TARGET services. What is that a bridge towards and what’s the real Pontes? We shall see.

By contrast, after Congress stalled the CLARITY Act, which would have accelerated the global roll-out of US dollar stablecoins, a Strategic Working Office for Rapid Deployment (SWORD) has opened at the International Development Finance Corporation tasked with “high-impact investments that advance US foreign policy, development, and national security priorities.” SWORD might use drops of USD stablecoins to build bridges, or demolish them, in key geopolitical and geoeconomic areas… like the energy sector(?)

So, back to central banks: is it better to make a bad situation worse with higher rates, or watch inflation move further above target? What is a 25bp hike going to do about a VLCC daily rate up 30-40X normal besides impact a housing or corporate loan holder already dealing with the sharp end of that daily rate increase? There is no ‘good’ choice, only bad ones – and in many senses.

Politically, we just saw another German election result where the far-right and far-left trounced the centre, and both populists are on the ascendancy more widely. Chancellor Merz has pledged a “reset” but admitted German conservatives don’t have the “answers.” But who does? The centre was built for a paradigm that arguably no longer exists. More rate hikes, or inflation, into that mix and then what? Australian consumers’ mood is sinking as RBA rates are rising, with another hike whispered for next week as Governor Bullock spoke of a “wild ride” and “limiting indirect effects of supply shocks” today - and the populist One Nation Party’s electoral fortunes are rising with it. 

The key point is if the wars vs. Russia and/or Iran were over, energy prices would be lower, so would inflation, and rates could then sustainably follow. Until that happens, it’s hard to make that case. If so, how could the wars end? By the West losing - but the consequences are unacceptable to it. By Russia and Iran losing - but the consequences are even more unacceptable to them. That implies Goolsbee’s “repeated and persistent supply-side shocks” are here to stay, or at least that things will get much worse before they get better.

Then recall central banks were created specifically to finance governments fighting wars. That’s what the Bank of England was set up to do vs. Napoleon, for example. That’s what they also did in WW1 and WW2, and in the US case right up until the Korean War. 

The key question is perhaps how long until a central bank recalls another way to deal with persistent geopolitical supply-side shocks is to help its government achieve ‘resilience’ via regaining physical control of supply chains. That’s what most Developed Markets are supposed to have the power to do when Emerging Markets do not. Such action would be a bridge to a huge structural shift; so would a lack of such action “because markets” or due to a lack of power.

Tyler Durden Tue, 09/22/2026 - 10:30
Tyler Durden

Alibaba Unveils China's Most Powerful AI Chip In $53 Billion Gambit

Zero Rss
6 days 22 hours ago
Alibaba Unveils China's Most Powerful AI Chip In $53 Billion Gambit

Alibaba Group has unveiled the Zhenwu V900, an AI accelerator it calls China's most powerful, marking a major escalation in its effort to challenge Nvidia and build a vertically integrated artificial-intelligence stack stretching from chips and networking to models and hyperscale data centers.

Alibaba booth at the 3rd China International Supply Chain Expo at the China International Exhibition Center in Beijing, Friday, July 18, 2025 (Mahesh Kumar / AP)

Unveiled by CEO Eddie Wu at Alibaba's Apsara Conference, the new processor from the company's T-Head semiconductor division reportedly delivers three times the performance of the Zhenwu M890 introduced just four months ago. The V900 carries 216 GB of memory, 1,200 GB per second of inter-chip bandwidth and native support for low-precision formats including FP8 and FP4, allowing it to handle both model training and inference, according to Alibaba. (independent benchmarks have not yet been published).

The V900 is scheduled to enter mass production and commercial release in the first quarter of 2027 - an acceleration from Alibaba's previous roadmap which had placed its next-generation accelerator in the latter part of next year. 

The company says its upgraded supernode architecture can support clusters containing as many as 500,000 cards. 

The hardware is part of a much larger full-stack strategy for Alibaba, which also says that their Qwen 4 AI model is currently in training, while its planned Qwen 4.5 and Qwen 5 generations are projected to scale to between 5 trillion and 10 trillion parameters. Its current flagship Qwen3.8-Max contains about 2.4 trillion parameters.

A 20-Gigawatt Bet

To support their goals, Alibaba obviously needs to undergo an enormous expansion of physical infrastructure.

Wu said Alibaba Cloud intends to operate more than 20 gigawatts of global data-center capacity by 2032. The company has not disclosed its current comparable base or a detailed site-by-site construction schedule, and the 20 GW figure measures electrical data-center capacity rather than a standardized quantity of AI compute.

Either way, these plans put Alibaba squarely inside the global hyperscaler infrastructure arms race - yet can they technically pull it off? As we recently noted, many of the world's announced AI projects face constraints that have little to do with model architecture: sufficient electricity, water, chips, networking gear, permitting, construction capacity and the ability to connect everything on schedule.

Alibaba's original commitment called for more than RMB 380 billion, or roughly $53 billion, of investment in AI and cloud infrastructure over three years - with chairman Joe Tsai reiterating that commitment in June. The company said in May that spending could ultimately exceed the original RMB 380 billion plan as AI demand accelerated. They then raised another HK$80 billion, approximately $10.2 billion, in an August share placement. According to Alibaba's SEC filing, roughly 60% of the net proceeds will expand global computing infrastructure, while approximately 40% will fund hyperscale AI data centers and upgrades to storage, databases and high-performance networking.

Citigroup analysts have reportedly estimated that infrastructure on the scale envisioned by Alibaba could eventually support roughly $160 billion in external cloud revenue. 

Alibaba's own stated target is substantial enough: CEO Eddie Wu has said the company expects to surpass $100 billion in annual combined cloud and AI external revenue within five years.

The Spending Is Already Showing Up

The near-term cost, for Alibaba anyway, is huge. They spent RMB67.7 billion, or almost $10 billion, on capital expenditures during the June quarter alone, a 75% increase from a year earlier. Free cash flow swung to an outflow of RMB44.7 billion, or about $6.6 billion, which Alibaba said was mainly attributable to increased cloud-infrastructure expenditure.

Headline net income fell 75% year over year to RMB10.4 billion, or about $1.5 billion. But attributing that entire decline to the AI buildout would be misleading. Alibaba said lower operating income was compounded by smaller gains from investment disposals and mark-to-market changes in its equity portfolio. On a non-GAAP basis, net income fell a less dramatic 38%, with technology investment cited as the primary drag.

The cloud business, however, is growing quickly. Alibaba's AI Cloud and Compute Services generated $7.14 billion in June-quarter revenue, up 45% year over year. AI-related product revenue alone reached $1.824 billion for the quarter, its twelfth consecutive quarter of triple-digit year-over-year growth.

On an annualized basis, Alibaba says AI-related product revenue had reached approximately $7.3 billion and is expected to approach $10 billion in the September quarter.

Management has also argued that the economics of the infrastructure spending are more attractive than the headline capex suggests. On its August earnings call, Alibaba said that at current gross margins it expects to recoup AI-related capex in roughly three years, potentially shortening the payback period to about 2.5 years as margins rise.

The silicon business has progressed rapidly as well. T-Head had shipped more than 560,000 Zhenwu chips by the spring, with more than 400 external customers across 20 industries. Alibaba now says the Zhenwu family is serving more than 650 customers spanning automobiles, finance, large language models, embodied intelligence, energy and manufacturing.

The Real Bottleneck

The greatest uncertainty may not be whether Alibaba can design competitive accelerators, but whether China can manufacture enough advanced silicon to support its ambitions.

As we recently noted, U.S. restrictions have limited Chinese access both to Nvidia's most advanced AI processors and to foreign foundry capacity used to manufacture cutting-edge Chinese designs. Those constraints have given Alibaba, Huawei and other domestic suppliers a powerful incentive to develop replacements.

Alibaba has not publicly identified the V900's foundry or manufacturing node, so it would be premature to state that SMIC will manufacture the processor. But the broader domestic supply chain remains constrained.

As we recently noted, SMIC has been able to manufacture 7-nanometer-class chips using sophisticated multi-patterning on deep-ultraviolet lithography systems, but China's advanced semiconductor industry still depends heavily on foreign equipment. Chinese chipmakers have accumulated years of ASML machinery while Huawei and domestic equipment suppliers race to build replacements, yet critical components including projection optics and high-power light sources remain difficult bottlenecks.

That means the challenge facing Alibaba extends well below the GPU architecture itself. Frontier-scale AI requires advanced logic, high-bandwidth memory, packaging, high-speed networking, optical components, cooling systems and enormous quantities of reliable electricity. Weakness anywhere in that chain can become the limiting factor.

And this is not merely a Chinese problem. As we recently noted, the global AI buildout is increasingly colliding with shortages of power, water, chips, fiber, construction resources and regulatory approvals. Twenty gigawatts on a presentation slide and 20 gigawatts of fully energized, chip-filled, revenue-producing data centers are two very different things.

GEOPOLITICS!

The timing of Alibaba's announcement is difficult to separate from the broader U.S.-China technology rivalry.

The V900 was unveiled just days before President Donald Trump is expected to host Chinese President Xi Jinping in Washington. As we recently noted, preparatory talks between Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng produced plans for a new U.S.-China AI dialogue and a proposed notification mechanism for serious AI incidents. Advanced AI-chip export restrictions, however, were not part of that particular discussion.

Washington is attempting to limit China's access to the most advanced semiconductor technology while Chinese companies are simultaneously developing indigenous chips, deploying cheaper models and building increasingly large domestic compute systems.

Alibaba's V900 is therefore more than another accelerator launch. It is one component of an attempt to vertically integrate the entire AI stack: proprietary processors, networking silicon, storage controllers, massive clusters, Qwen foundation models, agent platforms and ultimately tens of gigawatts of cloud infrastructure.

China can manufacture enough advanced silicon, memory and networking equipment, secure enough power, and build enough data-center infrastructure to turn the roadmap into operating compute?

Tyler Durden Tue, 09/22/2026 - 10:15
Tyler Durden

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